Judge: Frank M. Tavelman, Case: 23BBCP00045, Date: 2024-03-29 Tentative Ruling

Case Number: 23BBCP00045    Hearing Date: March 29, 2024    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

PETITION TO ENFORCE ARBITRATION

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Before the Court is a petition filed by Corinne Gerard (Petitioner). Petitioner seeks to compel Progressive United Financial Casualty Company (Progressive) to arbitrate Petitioner’s underinsured motorist claim. Petitioner claims that her insurance policy with Progressive includes a provision requiring disputes over underinsured motorist claims be arbitrated. Progressive has filed no response to this petition.

ANALYSIS: 

I.                    LEGAL STANDARD 

“Code of Civil Procedure section 1281.2 requires a trial court to grant a petition to compel arbitration if the court determines that an agreement to arbitrate the controversy exists.” (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59, [quotations omitted].) Accordingly, “when presented with a petition to compel arbitration, the court’s first task is to determine whether the parties have in fact agreed to arbitrate the dispute.” (Id.) A petition to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Id. at 71.)

As with any other specific performance claim, “a party seeking to enforce an arbitration agreement must show the agreement’s terms are sufficiently definite to enable the court to know what it is to enforce.” (Id. [internal citations omitted].) “Only the valid and binding agreement of the parties, including all material terms well-defined and clearly expressed, may be ordered specifically performed.” (Id.) An arbitration agreement “must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civ. Code § 1636.)

The language of the contract governs its interpretation if it is clear and explicit. (Civ. Code § 1368.) If uncertainty exists, “the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.” (Civ. Code § 1654.)

The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) It would then be responding party’s burden, in opposing the motion, to prove by a preponderance of the evidence any fact necessary to her opposition. (See Id.) “In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” (Id.)

Further, C.C.P. § 1281.2 requires a party seeking to compel arbitration “to plead and prove a prior demand for arbitration under the parties' arbitration agreement and a refusal to arbitrate under the agreement.” (Mansouri v. Superior Court (2010) 181 Cal.App.4th 633, 640-41 [“...if proof of a demand and refusal to arbitrate under the agreement is a necessary prerequisite to a petition to compel arbitration under section 1281.2, the failure to prove such demand and refusal is a failure to state a cause of action—a fundamental error that permits us to review the issue despite a party's failure to raise the theory in the trial court.”].)

II.                 MERITS

The Court has concerns with the proof of service submitted with this petition. The proof of service states that Petitioner’s counsel served the notice of hearing via email on Lily Nhan (Nhan) and Teresa Pagan (Pagan). It appears from email exchanges attached to the petitioner that Nhan and Pagan are attorney’s which represent Progressive. (See Petition Exh. H.) It also appears that a copy of the petition was served in the same way. (See Petition p. 99.)

C.C.P. § 1290.4. states “A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.” 

C.C.P. § 1290.4(b) states “If the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision.” C.C.P. § 1290.4(b)(1) elaborates that “Service within this State shall be made in the manner provided by law for the service of summons in an action.”

In summary, if the arbitration agreement provides for a method of service then that method must be followed on a petition to compel arbitration. If the arbitration agreement does not provide a method, the petitioner must serve the petition/notice in the same manner as a summons.

It is unclear whether the Petitioner’s Exhibit G is a full copy of the arbitration provision in her insurance agreement. The provision reads:

If we and an insured person cannot agree on:

1. the legal liability of the operator or owner of an uninsured motor vehicle or underinsured motor vehicle; or

2. the amount of the damages sustained by the insured person; this will be determined by arbitration. If the accident involves an uninsured motor vehicle, any demand for arbitration must be made within two years of the date of the accident. If the accident involves an underinsured motor vehicle, the demand must be made after all applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements and prior to the expiration of the bodily injury statute of limitations in the state in which the accident occurred. An insured person demanding arbitration must send written notice to us, or our agent for process, by certified mail, return receipt requested.

In the event of arbitration, arbitration shall be conducted by a single neutral arbitrator. The costs and fees of the arbitrator will be shared equally.

Unless both parties agree otherwise, arbitration will take place in the county in which the insured person resides.

Local rules of procedure and evidence will apply. A decision by the arbitrator will be binding with respect to a determination of:

1. the legal liability of the operator or owner of an uninsured motor vehicle or underinsured motor vehicle; and

2. the amount of the damages sustained by the insured person. The arbitrator will have no authority to award an amount in excess of the limit of liability.

It is not clear from this excerpt whether the language “Local rules of procedure and evidence will apply” is meant to extend to methods of service. If so, then it appears service is defective. Electronic service on an attorney purporting to represent a corporation is not a statutorily authorized method for service of process on a corporation. (See C.C.P. § 416.10.) It may be that Nhan or Pagan consented to electronic service of the petition/notice, but there is no communication attached to Petitioner’s papers indicating this is the case.

Alternatively, if the arbitration agreement has not been produced in full it may be the case that email service was authorized by a section of the agreement which was not produced. The Court has no way of determining whether this is the case given the documents produced.

In either case, the Court finds that Petitioner has not shown service of the petition/notice pursuant to C.C.P. § 1290.4. Accordingly, the petition is DENIED without prejudice.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Corinne Gerard’s Petition to Enforce Arbitration came on regularly for hearing on March 29, 2024, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE PETITION TO ENFORCE ARBITRATION IS DENIED WITHOUT PREJUDICE. 

THE COURT SETS A STATUS CONFERENCE RE ARBITRATION FOR AUGUST 1, 2024 AT 9:00 AM.

IT IS SO ORDERED. 

DATE:  March 29, 2024                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles